Lack of knowledge is the biggest barrier to exporting, according to a survey by two trade groups, the National Small Business Association and the Small Business Exporters Association.
Here are some tips for owners who are new to exporting:
CURRENCY CONCERNS: Changes in currency rates can affect your export business. For example, pricing your goods in U.S. dollars instead of your customer’s currency could reduce profit and make your goods or services less competitive overseas when currencies fluctuate, said Guido Schulz, global head of strategic management at AFEX, a company that handles overseas payments for small businesses.
Owners should also consider hedging against currency fluctuations in the countries they expect to do a lot of business with, Schulz said. That means purchasing foreign exchange contracts that set a price for euros or other currencies.
“You should lock in rates ahead of time,” Schulz said.
COUNTRY-BY-COUNTRY ISSUES: Before you start exporting to any country, make sure that you understand any of its regulations that could affect your products. There are also cultural differences that can have an impact on your relationship with foreign customers. U.S. embassies in each country can help you learn more.
TALK TO VETERAN EXPORTERS: You can learn a lot from small-business owners who are exporters, said NSBA Chairman David Ickert, who’s also a vice president at Air Tractor, an Olney, Texas, company that exports crop-dusting and firefighting aircraft to about 20 countries.
If you don’t know anyone who exports, you can find someone easily from trade groups and chambers of commerce. You can also find people with exporting know-how through SCORE, the organization that gives free advice to small businesses.